Why do we (still) use the crown?

Us Czechs, we tend to marginalize the common history with Austria and hide it somewhere in our subconscious. The most that we are willing to do is tolerate their presence in our history books. And we do this despite the fact that the Austrian and Austro-Hungarian history is decisive for us in so many ways that we tend to dismiss it – not because of its insignificance but rather because it is so self-evident. One of the most obvious realms where this is true is finance, currency matters and central banking.

At this point let us remember an impressive anniversary. The Austrian central bank celebrates 200 years of uninterrupted operation. In 1816, Francis II established “Die privilegierte oesterreichische National-Bank” (OeNB) five years after the Austrian sovereign default that resulted from the Napoleonic wars. We can therefore congratulate the Austrians because our central bank only turns 23 this year. At least it formally does.

History often wants us to believe that at certain turning points all that was bad is erased and the good is being built from zero. In reality however, even after the most fundamental and revolutionary changes, we can still see a lot of continuity and smooth transitions in between historical periods. The history of individual institutions, their employees, buildings or agendas naturally evolve in a gradual manner, without twists and turns.

Czech central banking underwent exactly this evolution. Formally, it was established only after the dissolution of Czechoslovakia, but it was hardly from scratch. The division of the State Bank of Czechoslovakia was a well thought out process. It was established in 1950 though the transformation of the National Czechoslovak Bank (NBČS) that, in turn, followed on the Bank Bureau of the Ministry of Finance. The bureau was the first financial authority of a young Czechoslovakia and, founded in 1918, its task was the oversight of monetary emission that was to be separated from the “German” Austrian one.

There was significant tension between the two monetary authorities – the Bank Bureau in Prague and the OeNB in Vienna – in regards to how to move forward after World War I. Prague wanted a radical reduction of the money supply that resulted in a strong long-term deflation, which was unheard of in Central Europe. Vienna, on the other hand, let the money emission become much less restricted, with high inflation as a result. Despite these differences, the Bank Bureau did, to a large extent, build on the infrastructure developed by the OeNB during the 19th century.

The first act of the OeNB in 1818 was the establishment of a currency exchange (Bank_Filial-Casse) in Prague. Thirty years after that, an OeNB branch was established in Prague to engage in discount trade (Filial-Escompte-Anstalt). It was the first of its kind in the whole monarchy, with Budapest being the second branch in 1851 and Linz one year later. Another proof of the importance of Bohemia for the OeNB is that out of the first branches the OeNB established, four were in Bohemia (Prague, Brno, Olomouc, and Opava) and by 1918, the number went up to 25 out of a total of 104. That share is much higher than the share of the Czech population in the monarchy. This branch system was taken over by the Bank Bureau of the newly emerged Czechoslovakia and was not changed one bit in the post-war years.

Regardless of the different opinions on monetary policy after World War I, the Bank Bureau publicly announced in March 1919 that it will continue to build on the heritage of the OeNB. It even adopted its work, disciplinary code, and the company rules (Dienstunterricht). Over 60% of the 356 employees were recruited from the ranks of former OeNB staff. We could add many other continuities to the list, which leads us to the conclusion that the Czech National Bank can be regarded as an indirect successor and maybe ever heir of the traditions of Austrian central banking.

There is no doubt that the monetary history of Austria-Hungary is a part of our daily lives. Czechoslovak and Czech monetary history reveals ties to the monarchy with one very important feature: the currency. We still use the crown in Czech Republic which was established after a monetary reform in 1892 by Franz Joseph I. With this reform the old currency (zlatky and krejcary) was renounced. The exchange rate between the new and old currency was 1:2 which has implications. Even for today’s language, a “pětka” (fiver) is the name for the 10 crown coin. Czech Republic is the last country of the former Austro-Hungarian Empire that still uses the crown – despite various regime changes and the republican tradition of Czechoslovakia.

Four statistics from 2018 portent trends for 2019. All have to do with human health, and none of them are good.

22 million

Yemen is the world’s largest humanitarian crisis, with 1 million people infected with cholera, over 8 million people at the brink of starvation and 22 million in need of humanitarian aid. The crisis is the direct result of the ongoing armed conflict between Muslim rebels and a weak president, supported by Saudi Arabia and its allies, including the US.

Yemen is a model of armed conflict in the 21stcentury: the business enterprise of arms sales to regimes to prop up meaningless conflicts under the guise of “promoting regional stability.” The resulting billions pad the pockets of governments and arms-makers and ensure continuity of the current decadent Western lifestyle which reliably ignores the fact that Yemen even exists. This despite the fact that, unlike the Holocaust or Stalin’s persecutions, the crisis in Yemen is extensively documented for all the world to see on a daily basis.

Our featured year-end article explores the dichotomies of the formation of today’s Europe and the conflicts, tensions, and solutions therein.

Europe has a long tradition of self-segregation, of multi-dimensionality, of debates on national identity that can go as far as internal conflict. The first failure of our ‘common home’ was the fracturing of the Roman Empire into a western and an eastern segment. Rome broke away from Byzantium, Catholicism from Orthodoxy, Protestantism from Catholicism, the Empire from the Papacy, East from West, North from South, the Germanic from the Latin, communism from capitalism, Britain from the rest of the continent. We easily perceive the differences that make up our identity; we are able at any time to distance ourselves from ourselves. We invented both colonialism and anti-colonialism; we invented Eurocentrism and the relativisation of Europeanism. The world wars of the last century began as intra-European wars; the European West and East were for decades kept apart by a ‘cold war’. An impossible ‘conjugal’ triangle has constantly inflamed spirits: the German, the Latin and the Slavic worlds.

Compared to most of the security institutions in Central Europe, the Czech Security Information Service (BIS) managed to describe Russian and Chinese intelligence activities in the Czech Republic in a remarkable detail. There are several points in the latest Annual Report we would like to highlight:

Russian and Chinese activities threatening the Czech security and other interests are a continuous priority for the BIS. While Russian activities “continuously focused primarily on influence operations and exploitation of Czech sources”, the Chinese changed up their tactics and focused more on intelligence infiltration instead of influence.

The size of the Russian diplomatic mission which includes a high number of individuals with affiliation to the Russian intelligence services represents several risks, especially because of the reckless attitude of Czech politicians and civil servants towards unclassified but non-public information.

Dear readers, in conjunction with the 100 – year anniversary of the founding of Czechoslovakia we are pleased to present the following article by renowned historian Igor Lukeš. (Martin Jan Stránský, Publisher)

Despite years of Nazi and communist occupation, the Czech Republic is now a member of NATO and its relations with the United States and other allies in the West are strong. It was heartwarming to see General James Mattis observing the Czech Army’s pass-in-review on October 28th. Given the Czech Republic’s geographic location, this is not a small achievement, and it is good to celebrate it.

At the same time, we need to anticipate problems and prepare to face them before they become insurmountable. It is a truism but one worth repeating that friends not only support and sustain each another, they also tell each other the truth, even when it is uncomfortable, inconvenient, or outright painful. This is what I propose to do today. I will argue that the Czech Republic

“I like reporters, perhaps I will invite them for dinner to the Saudi consulate“.

Thus spoke the president of the Czech Republic Miloš Zeman on Oct 24. Besides his acknowledged alcoholic dysfunction, the current president is an outspoken supporter of Russia and an avid hater of journalists.

So Czech Republic, happy birthday to you and to your citizens, who tolerate being represented by a foul-mouthed drunk on this, the centennial anniversary of the country.

But to be fair, the Czech Republic is not alone. On the other side of the pond there is another country that is trying to ignore the surrealistic nightmare of its current president as well. Both presidents are hostage to their pathologic narcissism, with its resultant degradation of values.

Martin J Stránský MD

Publisher, Přítomnost and The New Presence (www.pritomnost.cz)

Great-grandson of Adolf Stránský the country’s first Minister of Commerce in 1918 and one of Czechoslovakia’s founders.

A Czech journalist Jan Urban gives thoughts on the current post-modern political reality (not only) in the Czech Republic, reminding us on the principles of democracy. "One of the best analysis I have read in years" Martin Jan Stránský, publisher of The New Presence.